Real estate investments encompass a diverse array of opportunities, from residential investment properties to commercial ventures and land development projects. These investments offer tangible assets that often appreciate over time, providing potential for long-term wealth accumulation and passive income streams. Strategic timing and thorough research are crucial for maximizing returns with fluctuating market conditions and economic trends. Whether for personal portfolio diversification or institutional investment, real estate remains a cornerstone of wealth creation and financial stability for individuals and organizations alike.

Real estate investors stand to gain significantly from R. Kymn Harp’s extensive knowledge of tax-deferred exchanges under Section 1031 of the Internal Revenue Code. Kymn’s experience, knowledge, and pragmatic approach to these transactions greatly benefit his clients as they implement their investment plans to maximize financial results. Deferring taxes on capital gains, depreciation recapture, and other taxes normally payable upon the sale of real estate is the key  advantage of a Section 1031 tax-deferred exchange transaction. The combined tax deferral can exceed thirty percent of the total sale proceeds, enabling investors to reinvest the entire sale proceeds into a new investment property instead of paying those taxes to Uncle Sam. This allows investors to obtain greater investment leverage and maximize investment returns. Because it is permissible to continually implement successive exchanges, the duration of deferral can be unlimited. If owned by an individual, directly through an entity disregarded for tax purposes, the deferred tax may never be paid as a result of a step-up in basis upon the death of the taxpayer.  

The intricate regulations and deadlines for implementing a Section 1031 exchange are as unforgiving as they are well-defined. Kymn Harp guides his clients as they navigate the myriad rules and regulations governing Section 1031 tax-deferred exchanges of like-kind property to enable them to take full advantage of the permitted tax deferrals.

Kymn’s wealth of knowledge enables him to advise investors on tactical repositioning of their real estate portfolios. Investors can trade a wide range of real estate types while deferring taxes because the tax regulations implementing Section 1031 broadly defines what is meant by “like-kind” property. Essentially, all real estate located in the USA is treated as “like-kind” to all other real estate located in the USA. An investor might, for example, trade an apartment building for a warehouse; or farmland for a retail shopping center or triple-net investment property; so long as both properties are used in the taxpayer’s trade or business, or held for investment purposes.

Because of this flexibility, investors can change with the market, diversify their portfolios, and buy properties that better fit their long-term investment objectives.  Benefiting from Kymn’s command of the exchange rules and regulations, investors can reposition their real estate holdings to enhance opportunities for appreciation and revenue production.

Section 1031 exchange transactions have tight deadlines and technical procedural restrictions. Investors must, for instance, identify possible replacement property within 45 days after closing on the sale of the property being sold, and actually close on the acquisition of the replacement property not later than 180-days after that closing. Although simultaneous exchanges are possible, they are exceedingly uncommon. To facilitate a non-simultaneous exchange the exchanging taxpayer must use a qualified intermediary to hold the sale proceeds until the exchange is completed. If the investor takes control or even touches the sale proceeds, the tax-deferred exchange will fail and the sale proceeds will be taxable.

Kymn is well-versed in these technical regulations and through years of experience has established working connections within the exchange industry to facilitate smooth transactions. Investors who follow Kymn’s advice can proceed with confidence and peace of mind that their like-kind exchange will comply with the applicable exchange rules and qualify for the tax-deferral benefits authorized by Section 1031 of the Internal Revenue Code.

To be sure, Kymn is able to guide investor-clients as they sell a single property and replace it with multiple others, and conversely counsel clients when selling multiple properties with the intent to combine the sale proceeds into a single larger property. Similarly, Kymn is able to assist clients in completing tax-deferred exchanges of tenant-in-common (TIC) interests, and reverse exchanges where the replacement property is acquired before sale of the property being exchanged. Each of these have technical rules of their own. Investors can accomplish their particular investing goals with individualized, thorough guidance while being confident that they are adhering to tax regulations. Payment of capital gains taxes and other taxes can be deferred long-term, aiding investors in building large real estate portfolios through successive tax-deferred exchanges. Over time, this compounding effect can preserve wealth, enhance wealth creation, and facilitate long-range legacy planning.

In addition to counselling clients on tax-deferred exchanges, Kymn Harp has presented numerous seminars to other attorneys on the topic and is widely considered a thought-leader among his peers. 

With his knowledge of Section 1031 tax-deferred exchanges, R. Kymn Harp offers real estate investors a valuable opportunity to improve their investment plans, optimize returns, and succeed financially over the long run. Kymn Harp is a priceless resource for real estate investors wishing to maximize their portfolios and postpone taxes.